The Finance Ministry on Sunday said public sector banks have disbursed Rs 8,320 crore till June 5 under the Rs 3-trillion Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector, hit hard by the coronavirus-induced lockdown.
PSBs have sanctioned loans worth Rs 17,705.64 crore under the 100 per cent ECLGS starting June 1.
The scheme is the biggest fiscal component of the Rs 20-trillion Self-Reliant India Mission package announced by Finance Minister Nirmala Sitharaman last month.
“As of 5 June 2020, #PSBs have sanctioned loans worth Rs 17,705.64 crore under the 100 per cent Emergency Credit Line Guarantee Scheme, out of which Rs 8320.24 crore have been disbursed,” Sitharaman said in a tweet.
State Bank of India (SBI), the country’s largest lender has sanctioned Rs 11,701 crore, while disbursement was nearly half at Rs 6,084.71 crore at the end of June 5.
It is followed by Punjab National Bank (PNB) with a sanction of Rs 1,295.59, but disbursement was less than one-fifth at Rs 242.92 crore.
On May 21, the Cabinet had approved additional funding of up to Rs 3 trillion at a concessional rate of 9.25 per cent through ECLGS for the MSME sector.
Under the scheme, 100 per cent guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 trillion to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers, in the form of a guaranteed emergency credit line (GECL) facility.
For this purpose, a corpus of Rs 41,600 crore was provided by the government, spread over the current and next three financial years.
The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till an amount of Rs 3 trillion is sanctioned under GECL, whichever is earlier.
The main objective of the scheme is to provide an incentive to member lending institutions to increase access and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by giving them 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers.
All MSME borrower accounts with an outstanding credit of up to Rs 25 crore as on February 29, which were less than or equal to 60 days past due as on that date, i.e., regular, SMA-0 and SMA-1 accounts, and with an annual turnover of up to Rs 100 crore, would be eligible for GECL funding under the scheme.